Rostin Behnam, the chair of the Commodity Futures Trading Commission (CFTC), stated that despite being “just code,” decentralized exchanges (DEXs) and other elements of the decentralized finance (DeFi) realm can be subject to regulation in the United States.
During a recent episode of Bloomberg’s Odd Lots podcast, Behnam expressed his view by stating, “One might argue that since there are no institutions or individuals involved, and it’s purely driven by code, it cannot be regulated. However, framing the issue in such a way is fundamentally misguided.”
He made the point that what an exchange offers and who originally set it up are more important than how it is run, saying:
What American customers are exposed to and offered truly matters? And who is the person or group who created that company and that code to provide those goods?
According to Behnam, US securities legislation already covers most digital assets, which states that “for better or worse, legal precedent is the driving force that sits as the foundation of our legal analysis.”
Behnan stated, “We’ll keep holding bad actors accountable,” adding that the CFTC or the Securities and Exchange Commission (SEC) will oversee DeFi.
In the US, the CFTC controls trading in commodities and derivatives, while the SEC generally oversees the issue and trading of securities. Because of this separation of duties, authorities have struggled to classify different digital assets.
Gary Gensler, the chairman of the SEC, has previously made it clear that Bitcoin is a commodity, but he has declined to elaborate on other digital assets.
In the podcast interview, Behnam did not go into specifics about certain digital assets but stated that cryptocurrency, in general, should be regulated like other financial assets.
The CFTC head stated, “As we think about a policy that we construct for crypto, we have to use the same playbook that we have used in the past.”
